Contracting out maintenance of infrastructure has reduced transparency and put tax dollars at risk

Feb 19, 2013

Parkland Institute

EDMONTON – A new report released this morning by the U of A’s Parkland Institute says that Alberta’s contracting out of infrastructure maintenance to private firms has resulted in decreased transparency and accountability, and has put Alberta taxpayer dollars at risk.

The report, entitled Delivery Matters: Public Infrastructure, Privatized Maintenance, and Government Transparency, was originally intended to evaluate the costs of the outsourcing of maintenance work for public buildings to private “property management” companies, a practice which has increased exponentially since 2006.

This objective proved impossible, however, as Alberta’s privacy office repeatedly denied Parkland Institute’s efforts to obtain the cost details of the maintenance contracts.

“This is a serious problem,” says the report’s lead author Regan Boychuk. “We’re dealing with a government that repeatedly looks to contract out services to the private sector, yet Albertans are prevented from examining the full consequences of this outsourcing. Private sector involvement diminishes transparency and accountability.”

Efforts to probe the quality of work done by private sector companies were further hampered by government changes to the metric by which the condition of public buildings is measured. The new metric, adopted in the midst of a surge in contracting out, not only makes it impossible to compare the condition of buildings before and after contracting out, its positive findings also seem to contradict government annual reports citing a significant infrastructure deficit.

The study also raises concerns about the two companies getting the bulk of government maintenance contracts, Edon Management and SNC-Lavalin. Edward Lazdowski, president of Edon, has previously been investigated for mishandling trust funds and has been named in a lawsuit for lack of maintenance resulting in injury. In the past year alone, SNC-Lavalin has been involved in a series of high-profile international scandals resulting in investigations by the RCMP and Swiss authorities, and a ban by the World Bank of one of its subsidiaries from bidding on projects. These scandals and allegations raise significant questions about the security of the tens of millions in Alberta public dollars being transferred annually to these private corporations.

Parkland Research Director, and report co-author Shannon Stunden Bower, sums up the findings by saying “ultimately, we were unable to do a cost analysis of infrastructure maintenance, determine the actual condition of the province’s buildings, or determine whether taxpayer dollars were being securely managed. This is not good news for Albertans, and is especially surprising given this government’s stated commitment to openness and transparency.”

The Parkland Institute is a non-partisan public policy research institute in the Faculty of Arts at the University of Alberta. Delivery Matters is available on the Parkland web site at parklandinstitute.ca.

Parkland Institute is an Alberta-wide, non-partisan research centre situated within the Faculty of Arts at the University of Alberta. Parkland Institute studies economic, social, cultural, and political issues facing Albertans and Canadians, using the perspective of political economy. more »